System and method for providing promotional pricing

ABSTRACT

A system and method for providing promotional pricing is disclosed. One or more pricing offers may be provided to a plurality of credit accounts, wherein the pricing offers may be directed to transactions associated with particular products and/or merchants. It may be determined whether a transaction associated with a credit account qualifies for certain pricing offers based on predetermined criteria. A balance incurred through a transaction may be assigned to a promotional bucket associated with a particular pricing offer if the transaction qualifies for the particular pricing offer, or the balance may be assigned to a default bucket if the transaction does not qualify for any pricing offer, thereby causing a total balance to be distributed among the default bucket and the promotional buckets. Payments associated with the credit account may be allocated to the default bucket and the one or more promotional buckets according to a payment hierarchy.

RELATED APPLICATIONS

This patent application is a continuation of U.S. patent applicationSer. No. 10/909,407, filed on Aug. 3, 2004, now U.S. Pat. No. 7,392,222,entitled “System and Method for Providing Promotional Pricing.” Thedisclosure of this priority application is hereby incorporated herein byreference in its entirety.

FIELD OF THE INVENTION

The present invention relates generally to banking and financialservices. More particularly, the present invention relates to a systemand method for providing promotional pricing for credit accounts.

BACKGROUND OF THE INVENTION

A credit card is generally known as a payment card issued to a customerfor purchasing goods and services or obtaining cash against a line ofcredit established by the issuer. It not only enables a customer to makecashless payment throughout the world, but also offers the financialflexibility to repay the credit extended either at once or on aninstallment basis. Apart from being a convenient financial instrumentfor the customers, credit cards or credit accounts also prove to be apowerful revenue-generating tool for the card-issuers. Routinely, acard-issuer can collect fees from merchants that honor the credit cardin their transactions. The issuer can also collect finance charges fromcustomers who carry unpaid balance in their accounts.

In recent years, card-issuers have been offering various types ofpromotional programs to attract new customers or to increase transactionactivities among existing customers. For example, most banks promise alow introductory interest rate to new card members. Many offerlow-interest-rate balance transfer opportunities by providing customerswith balance transfer coupons or convenience checks. These promotionalprograms typically lower the annual percentage rate (APR) for aparticular portion of a customer's account balance for a certain periodof time, thereby encouraging the customer to spend more or borrow moreagainst his or her available credit. As a result, the customer's accountbalance is typically subdivided into two or three parts, each beingsubjected to a different APR. For example, the account balance resultingfrom regular purchases may have a first APR of 9.99%, the balanceresulting from cash advances may have a second APR of 19.99%, and thebalance transferred from another card may have a third APR of 6.99% for6 months. Here, the first and second APRs may have been specified in thecard member agreement while the third APR may be a promotional ratevalid for a limited time period.

A number of problems exist in traditional credit account management andpromotional offering. For example, traditional credit accounts areusually limited to either a two-tier configuration (i.e., without anypromotional APR) or a three-tier configuration (i.e., with only onepromotional APR). Therefore, existing credit account systems typicallylack the ability to offer multiple concurrent promotional APRs to asingle account or to process transactions and payments based on multipleconcurrent promotional APRs. This deficiency can significantly limit thecard-issuer's ability to effectively promote a large array of productsor services to each customer. Moreover, with the traditional two-tier orthree-tier credit account configuration, there is a fixed paymentarrangement specified in an initial card member agreement, which doesnot allow customer input on the payment allocation. Further, traditionalcredit account systems lack the ability to retroactively adjust paymentallocation or re-calculate fees and charges.

Other problems and drawbacks also exist.

In view of the foregoing, it would be desirable to provide a solutionfor managing credit accounts and promoting credit sales which overcomesthe above-described deficiencies and shortcomings.

SUMMARY OF THE INVENTION

One embodiment of the present invention comprises a method for providingpromotional pricing. The method may comprise providing one or morepricing offers to a plurality of credit accounts, wherein at least oneof said pricing offers is directed to a transaction selected from thegroup consisting of a purchase of a specific product, a purchase of aproduct within a defined class of products, a purchase from a specificmerchant, a purchase from a merchant within a defined class ofmerchants, a purchase in a specific date and time range, and a purchasein a specific amount range. The method may also comprise determiningwhether a transaction associated with a credit account qualifies forsaid one or more pricing offers based on at least one predeterminedcriterion. The method may further comprise assigning a balance incurredthrough a transaction to a promotional bucket associated with aparticular pricing offer if said transaction qualifies for saidparticular pricing offer, or assigning said balance to a default bucketif said transaction does not qualify for said one or more pricingoffers, thereby causing a total balance associated with said creditaccount to be distributed among said default bucket and one or morepromotional buckets. The method may additionally comprise allocatingpayments associated with said credit account to said default bucket andsaid one or more promotional buckets according to a payment hierarchy.

Another embodiment of the present invention comprises a method forproviding promotional pricing. The method comprises: providing one ormore pricing offers to a plurality of credit accounts; determiningwhether a transaction associated with a credit account qualifies forsaid one or more pricing offers based on at least one predeterminedcriterion; assigning a balance incurred through said transaction to apromotional bucket associated with a particular pricing offer if saidtransaction qualifies for said particular pricing offer, or assigningsaid balance to a default bucket if said transaction does not qualifyfor said one or more pricing offers, thereby causing a total balanceassociated with said credit account to be distributed among said defaultbucket and one or more promotional buckets; applying fees and charges tosaid default bucket and said one or more promotional buckets based atleast in part on said one or more pricing offers; and allocatingpayments associated with said credit account to said default bucket andsaid one or more promotional buckets according to a payment hierarchy,wherein said payment hierarchy is retroactively adjustable.

Yet another embodiment of the present invention comprises a system forproviding promotional pricing. The system comprises: means for providingone or more pricing offers to a plurality of credit accounts, wherein atleast one of said pricing offers is directed to a transaction selectedfrom the group consisting of: a purchase of a specific product, apurchase of a product within a defined class of products, a purchasefrom a specific merchant, a purchase from a merchant within a definedclass of merchants, a purchase in a specific date and time range, and apurchase in a specific amount range; means for determining whether atransaction associated with a credit account qualifies for said one ormore pricing offers based on at least one predetermined criterion; meansfor assigning a balance incurred through a transaction to a promotionalbucket associated with a particular pricing offer if said transactionqualifies for said particular pricing offer, or assigning said balanceto a default bucket if said transaction does not qualify for said one ormore pricing offers, thereby causing a total balance associated withsaid credit account to be distributed among said default bucket and oneor more promotional buckets; and means for allocating paymentsassociated with said credit account to said default bucket and said oneor more promotional buckets according to a payment hierarchy.

Still another embodiment of the present invention comprises a system forproviding promotional pricing. The system comprises: means for providingone or more pricing offers to a plurality of credit accounts; means fordetermining whether a transaction associated with a credit accountqualifies for said one or more pricing offers based on at least onepredetermined criterion; means for assigning a balance incurred throughsaid transaction to a promotional bucket associated with a particularpricing offer if said transaction qualifies for said particular pricingoffer, or assigning said balance to a default bucket if said transactiondoes not qualify for said one or more pricing offers, thereby causing atotal balance associated with said credit account to be distributedamong said default bucket and one or more promotional buckets; means forapplying fees and charges to said default bucket and said one or morepromotional buckets based at least in part on said one or more pricingoffers; and means for allocating payments associated with said creditaccount to said default bucket and said one or more promotional bucketsaccording to a payment hierarchy, wherein said payment hierarchy isretroactively adjustable.

One further embodiment of the present invention comprises a computerreadable medium having code for causing at least one processor toprovide promotional pricing. The computer readable medium comprises:code adapted to provide one or more pricing offers to a plurality ofcredit accounts, wherein at least one of said pricing offers is directedto a transaction selected from the group consisting of: a purchase of aspecific product, a purchase of a product within a defined class ofproducts, a purchase from a specific merchant, a purchase from amerchant within a defined class of merchants, a purchase in a specificdate and time range, and a purchase in a specific amount range; codeadapted to determine whether a transaction associated with a creditaccount qualifies for said one or more pricing offers based on at leastone predetermined criterion; code adapted to assign a balance incurredthrough a transaction to a promotional bucket associated with aparticular pricing offer if said transaction qualifies for saidparticular pricing offer, or to assign said balance to a default bucketif said transaction does not qualify for said one or more pricingoffers, thereby causing a total balance associated with said creditaccount to be distributed among said default bucket and one or morepromotional buckets; and code adapted to allocate payments associatedwith said credit account to said default bucket and said one or morepromotional buckets according to a payment hierarchy.

One still further embodiment of the present invention comprises acomputer readable medium having code for causing at least one processorto provide promotional pricing. The computer readable medium comprises:code adapted to provide one or more pricing offers to a plurality ofcredit accounts; code adapted to determine whether a transactionassociated with a credit account qualifies for said one or more pricingoffers based on at least one predetermined criterion; code adapted toassign a balance incurred through said transaction to a promotionalbucket associated with a particular pricing offer if said transactionqualifies for said particular pricing offer, or assigning said balanceto a default bucket if said transaction does not qualify for said one ormore pricing offers, thereby causing a total balance associated withsaid credit account to be distributed among said default bucket and oneor more promotional buckets; code adapted to apply fees and charges tosaid default bucket and said one or more promotional buckets based atleast in part on said one or more pricing offers; and code adapted toallocate payments associated with said credit account to said defaultbucket and said one or more promotional buckets according to a paymenthierarchy, wherein said payment hierarchy is retroactively adjustable.

Additional features and advantages of the invention will be set forth inthe description that follows. The objects and other advantages of theinvention will be realized and attained by the system and methods,particularly pointed out in the written description and claims hereof aswell as the appended drawings.

BRIEF DESCRIPTION OF THE DRAWINGS

The purpose and advantages of the present invention will be apparent tothose of skill in the art from the following detailed description inconjunction with the appended drawings in which like referencecharacters are used to indicate like elements.

FIG. 1 is a block diagram illustrating an exemplary credit account forproviding promotional pricing according to an embodiment of the presentinvention.

FIG. 2 is a flow chart illustrating an exemplary method for providingpromotional pricing according to an embodiment of the present invention.

FIG. 3 is a flow chart illustrating an exemplary process for setting uppricing offers and updating credit accounts according to an embodimentof the present invention.

FIG. 4 is a flow chart illustrating an exemplary process for qualifyingtransactions according to an embodiment of the present invention.

FIG. 5 is a flow chart illustrating an exemplary process for applyingpayments according to an embodiment of the present invention.

FIG. 6 is a flow chart illustrating an exemplary process for applyingfees and charges according to an embodiment of the present invention.

FIG. 7 is a block diagram illustrating an exemplary payment hierarchyaccording to an embodiment of the present invention.

DETAILED DESCRIPTION OF THE INVENTION

Reference will now be made in detail to the present embodiments of theinvention, examples of which are illustrated in the accompanyingdrawings.

Referring to FIG. 1, there is shown a block diagram illustrating anexemplary credit account 100 for providing promotional pricing accordingto an embodiment of the present invention. The exemplary account 100 maycomprise a number of buckets each of which may have a separate balance,APR, and other terms.

For example, Bucket 1 may be a “default bucket” or “contract bucket,”which holds the balance resulting from regular (i.e., non-promotional)transactions. The APR(s) and all relevant terms applicable to Bucket 1may be those specified in an initial card member agreement. It is alsopossible to have two separate default buckets, one for regular purchasesand one for regular cash advances, for example.

Buckets 2 through N may be promotional buckets holding balancesresulting from qualified transactions according to various promotionalprograms. For example, Bucket 2 may contain the balance transferredduring a particular program period and may be subjected to a specificpromotional APR. It is also possible to have additional balance transferbuckets for different promotional APRs. Bucket 3 may contain the balanceresulting from convenience check transactions. Bucket 4 may contain thebalance resulting from airfare purchases with XYZ Airline, where the XYZAirline may be a business partner associated with the card-issuer. Alowered APR for Bucket 4 may promote ticket sales for the XYZ Airline.Further, balance and transactions associated with Bucket 4 may be linkedwith a mileage reward program. According to an embodiment of the presentinvention, different buckets may be associated with different rewardprograms. Bucket 5 may contain the balance resulting from general orspecific purchases at ABC Department Store. The ABC Department Store maybe another merchant affiliated with the card-issuer. A lower APR mayapply to all purchases at the ABC Department Store for a certain periodof time. Or a low or zero APR may apply to certain purchases (e.g.,furniture and home appliances or other product of a particularmanufacturer) for certain period of time. Bucket 6 may contain thebalance from certain vacation package purchases, or another category ofpurchase regardless of merchant identity. Bucket 7 may be associatedwith same-as-cash promotions where the customer may accumulateinterest-free balances for a few months and only start to pay financecharges if the same-as-cash balance is not paid off by end of thepromotion period. Bucket 8 may be associated with foreign orinternational purchases, wherein balances and fees incurred in differentforeign currencies may be accumulated. Special fees, value-added taxesand special exchange rates may be applied to the balance in Bucket 8.Bucket N may be associated with fixed-payment fixed-term promotionswhere the customer agrees to pay back a balance at a fixed installmentamount over a fixed number of months.

As exemplified by the credit account 100, the multi-tiered multi-bucketaccount system may offer numerous possibilities for the card-issuer tooffer promotional pricing. There can be an arbitrary number of bucketsfor each credit account, each bucket being associated with one or morepromotional programs. The transactions and resulting balances may becategorized and assigned to different buckets based on transaction types(e.g., purchases, balance transfers or cash), merchant/productidentities (e.g., UVW vacations, XYZ Airline tickets, or LMN books), orpromotional programs (e.g., fixed-payment fixed-term programs or homeimprovement purchase programs). In general, a pricing offer may bedirected to transactions such as a purchase of a specific product, apurchase of a product within a defined class of products, a purchasefrom a specific merchant, a purchase from a merchant within a definedclass of merchants, a purchase in a specific date and time range, or apurchase in a specific amount range.

For each promotional bucket, there may be a set of criteria fordetermining which transactions are qualified so that the resultingbalance can be assigned to this particular bucket. The qualificationcriteria may specify, for example, the transaction type(s),qualification period and amount restriction for the correspondingpromotion program. Those transactions that do not qualify for anypromotional bucket may be assigned to the default bucket(s). For eachbucket, there may be a different set of terms regarding balance paybackmethod, fees and charges, rewards amount, etc. When the customer makes apayment, it may be applied to the various buckets according to a paymenthierarchy. The payment hierarchy may dictate the order in which thebuckets receive payments and the amount each bucket receives. Thepayment hierarchy may be structured based on the card member agreement,promotional pricing offers, business rules and/or customer directions.

It should be appreciated that the various buckets may be created atdifferent times. For example, when there is not any account balance,there may only be one or more default buckets. Or the default bucket(s)may be created only when a regular transaction has been posted to theaccount. As for promotional buckets, they may be created for a creditaccount around the time when the corresponding pricing offers aredisclosed to the customer, i.e., at the beginning of the program period.Or a promotional bucket may be created only when a qualified transactionis posted to the account. According to embodiments of the invention, thevarious buckets may exist at substantially the same time, or duringdifferent time periods with or without overlaps.

FIG. 2 is a flow chart illustrating an exemplary method for providingpromotional pricing according to an embodiment of the present invention.This exemplary flow chart provides an overview of how a card-issuer mayprovide and manage the pricing offers. Some of the process steps aredescribed in greater detail with reference to FIGS. 3-6.

In step 202, one or more uniquely identifiable promotional pricingoffers may be created and set up. Based on approved promotional pricingrequests, unique identifiers for the pricing offers may be created. Allthe pricing features including qualification criteria relevant to thepricing offers may be set up and recorded in an offer managementdatabase. Typical pricing features may include, without limitation:qualifying transaction type, promotional balance payback method, paymenthierarchy placement, promotional pricing fee placement, qualifyingtransaction amount restrictions, and promotional pricing qualificationperiod. Once the pricing offers are set up, the relevant terms andconditions may be created in preparation for disclosure to customers.

In step 204, the credit account data may be updated based on the newpricing offers. This step may apply to both prospective card members andexisting customers. For example, prospective card members that qualifyfor the pricing offers may be selected. These qualified new customersmay receive notification of offer availability via updated card memberagreements or other types of communications. For existing customers thatqualify for the pricing offers, their accounts may be flagged. Forexample, each credit account may be linked to one or more promotionidentifiers (“Promo IDs”) that the account qualifies for.

The flagged accounts may be referenced in step 206 for transactiondecisioning. In this step, credit card transactions may be examinedbased on the qualification criteria. Upon qualification, eachtransaction may be assigned to its appropriate bucket. If acorresponding bucket does not exist, it may be created immediately inorder for a qualified transaction to be properly assigned.

In step 208, processed payments may be applied to the credit accounts.For each account, the payment may be allocated to one or more bucketswithin the account based on a payment hierarchy. Upon paymentallocation, the account data may be updated.

In step 210, fees and charges may be applied to each account based onits qualified transactions, payment information, and the updated accountstatus, for example. Upon application of the fees and charges, theaccount data may be updated.

In step 212, the card-issuer may receive and service customer inquiries.The service may be provided at a telephone call center, on an Internetwebsite, or via regular mail or electronic mail. A customer 20 mayrequest detailed information regarding an ongoing pricing offer anddemand inclusion therein. Or the customer 20 may be inquiring about apotential promotional pricing error on his or her account. Or thecustomer 20 may be requesting an adjustment to the payment hierarchy ofhis or her account. In the event of a potential pricing error, acustomer service representative or an automated computer system mayidentify the error, provide a temporary solution to the customer, andcreate an issue report for correction of the pricing error. If the erroris identified in the promotional pricing creation and setup process,such error may be elevated as a system-wide issue. For example, asoftware program may be utilized to provide a user interface forallowing a customer service representative or other employee to reportsystem errors. If the customer requests an adjustment to the paymenthierarchy, the adjustment may be applied retroactively. That is, one ormore earlier payments may be re-allocated across the buckets in thecustomer's account. With this adjustment, any change in fees, chargesand rewards may be re-calculated and the customer's account status maybe updated accordingly. The issuer may apply a charge to thecardholder's account for executing the re-allocation. Further, thecustomer-preferred payment hierarchy may be recorded for application tolater payments.

Apart from the ability to request or suggest payment re-allocation, acustomer may also be able to move existing debt (i.e., balances) fromone bucket to another. For example, through a web interface or thecustomer service call center, a customer may transfer balances from oneor more buckets to a fixed-payment fixed-term bucket. Or the customermay merge the balances from several buckets into a single bucket. Theseprocesses are similar to balance transfers within the customer's creditaccount, which may simplify subsequent payment allocations.

In step 214, when the account cycle date is reached, the promotionalpricing account information may be communicated to the customers via themonthly online or paper statements. The statements may report multipleAPRs, that is, one or more different APRs for each promotional bucket.The statements may disclose specific account information for regulatorycompliances. For example, a separate set of APRs, known asjurisdiction-specific APRs, may be calculated and disclosed based on theregulations of a particular state or other government entity, such asCalifornia regulations. Further, according to federal regulations suchas the Truth In Lending Act, one or more effective APRs may be disclosedfor each bucket to reflect true costs of a loan. One or more aggregatedand/or effective APRs may also be disclosed for the credit account.Therefore, the statements may report to the customer multiple APRs whichinclude, for example, one or more annual percentage rates associatedwith a particular bucket, one or more aggregated annual percentage ratesassociated with the credit account, one or more effective annualpercentage rates associated with the credit account, and one or morejurisdiction-specific annual percentage rates associated with the creditaccount.

During statement generation, all the account information that has beenupdated due to various aspects (e.g., payment allocation, fees andcharges and customer adjustment) of the promotional pricing offers maybe incorporated into the statements. For example, for eachnon-fixed-payment fixed-term or non-same-as-cash promotional bucket, thestatement may display its daily periodic rate, corresponding APR,previous and current cycle average daily balances, transaction fees,finance charges, and ending balance. For a fixed-payment fixed-termpromotional bucket, the statement may display its outstanding principalbalance, original transaction amount, monthly finance charge for billingperiod, fixed payment amount, expiration date, daily periodic rate,finance charge calculation method, and grace period explanation. If aretroactive adjustment has been made to a customer's account, one ormore revised statements may be generated for the past months, or theadjustments may be reflected on current and future statements.

According to an embodiment of the present invention, the customer mayalso receive information associated with each transaction via electronicmail (E-mail), text messaging or other communication channels shortlyafter the transactional data are transmitted to the card issuer. Thecard issuer may have the customer's E-mail address on file. As soon as apurchase is posted to the customer's account, an E-mail message may besent to inform the customer of the details of the transaction such asthe transaction amount, date and time of transaction, merchant, productpurchased. The customer may also be informed of pricing informationassociated with the transaction, such as its qualification for anypromotional pricing offer, to which bucket the corresponding balance isassigned, the applicable APR, fees and rewards, etc. The customer may beoffered one or more options to modify the current processing of thetransaction. For example, the customer may choose to re-assign thebalance to another bucket or to request a different payment method. Thecustomer may parse the transaction summary information and load it intoa financial management software application for each bookkeeping.Instead of E-mail notification for each transaction, similarnotifications may be sent on a daily basis or weekly basis.Alternatively, these notifications may be loaded onto a web server andprovided to the customer on a regular basis.

In step 216, a simulation function may be provided to simulate apayment-and-transaction stream for a customer's credit account. Asretroactive changes are applied to the customer's account, thepayment-and-transaction stream may keep track of the accounttransactions, balance movements, payments and payment allocations in achronological order, thereby facilitating re-calculation of the APRs,fees, and rewards affected by the retroactive changes. The simulationfunction may be referred to as a “What-If” function since the customeror the customer service representatives may utilize this function tofind out what happens if certain adjustments are made to the customer'saccount. That is, the balance assignment and/or payment allocation maybe hypothetically adjusted and the resulting account status (e.g.,balance, fees and charges) may be shown interactively. By tryingdifferent payment-and-transaction stream variations, a desiredadjustment to the account may be determined and then executed. Inaddition, a rewards amount affected by the adjustment may bere-calculated. The simulation may also allow a customer to varyimmediate and future payment amounts to observe their impact on thebucket balances, APRs, and reward points.

Referring to FIG. 3, there is shown a flow chart illustrating anexemplary process for setting up pricing offers and updating creditaccounts according to an embodiment of the present invention. Thisprocess may be an exemplary implementation of the steps 202 and 204shown in FIG. 2. The process may involve an offer setup team, a featurebuild team and a list management team.

In step 302, the offer setup team may receive a promotional pricingrequest. In step 304, the offer setup team may check whether anymarketing materials related to the requested pricing offer exist. Themarketing materials may include, for example, any content describing thepricing features of the pricing offer and disclosure of terms andconditions as required for legal compliance. If such materials do notexist, they may be created in step 306. The pre-existing or newlycreated marketing materials may then be sent to the customers in step336.

In step 308, the offer setup team may set up the requested pricing offerin an offer management database. Then, in step 310, the offer managementdatabase may check existing Promo IDs, convenience check numbers orbalance transfer codes. It may be determined, in step 312, whether anyexisting promotional pricing offer matches the requested pricing offer.If a match exists, an existing identifier may be noted for the matchingpricing offer, and the process may branch to step 316. If a match doesnot exist, a feature request report may be created in step 314 forsubmission to the feature build team. Upon receiving the feature requestreport, the feature build team may, in step 324, build a new uniqueidentifier (e.g., a Promo ID, convenience check number, or balancetransfer code) for the requested pricing offer. The new identifier maybe loaded into the offer management database in step 326.

In step 316, the new or existing identifier may be attached to the newpricing offer. The new pricing offer may then be approved in step 320.And the “offer build complete” message may be communicated to the listmanagement team in step 322.

In step 328, the list management team may determine what customerpopulation the new pricing offer applies to and may create marketingoffers containing both control and test populations split appropriatelyfor back-end analysis. In step 330, upon receiving the “offer buildcomplete” message, the list management team may pull the new pricingoffer identifier from the offer management database and match it toqualified customer population. Then, in step 332, it may be determinedwhether the new pricing offer is a balance transfer or convenience checkpromotion. Either way the pricing offer information may be sent to thecustomers in step 336. If the new pricing offer is not for balancetransfers or convenience checks, the updated population may be sent tothe account database in step 334. In step 338, the qualified accountsmay be flagged based on the updated population.

FIG. 4 is a flow chart illustrating an exemplary process for qualifyingtransactions according to an embodiment of the present invention. Thisprocess may be an exemplary implementation of step 206 shown in FIG. 2.The exemplary process starts in step 402 where data associated withauthorized transactions may be received. In step 404, it may bedetermined whether a transaction is a cash or quasi-cash transaction. Ifso, the process may branch to step 414. Otherwise, it may be determinedin step 406 whether the transaction is a balance transfer or conveniencecheck transaction. If the transaction is not a balance transfer orconvenience check transaction, the process may branch to step 407.Otherwise, the process may branch to step 408. In step 407, it may bedetermined whether the transaction is a purchase. If the transaction isa purchase, the process may branch to step 414. Otherwise, it may bedetermined in step 408 whether the transaction is for a particularpromotion. If the transaction is for a particular promotion, the processmay branch to step 410. If not, it may be determined in step 414 whetherthe corresponding credit account has a permanent or temporarypromotional flag. If it is determined in step 416 that the account isnot flagged for any promotion, then the transaction may be processed asregular non-promotional transaction in step 418. If the account isflagged, then it may be determined in step 420 whether the transactionqualifies for the promotion. If the transaction does not qualify, it maybe processed as a regular transaction in step 418. If it does qualify, apromotional bucket may be created for the transaction in step 410. Then,in step 412, the balance resulting from the transaction may be assignedto the promotional bucket.

FIG. 5 is a flow chart illustrating an exemplary process for applyingpayments according to an embodiment of the present invention. Thisprocess may be an exemplary implementation of step 208 shown in FIG. 2.In step 502, processed customer payments may be received. It may bedetermined in step 504 whether a payment is for a fixed-paymentfixed-term promotion. If so, a fixed payment amount may be applied tothe fixed-payment fixed-term bucket and the process may branch to step508 if there is still payment left. If the payment is not for anyfixed-payment fixed-term promotion, a payment hierarchy may bedetermined in step 508. Based on the payment hierarchy, in step 510 theremaining payment may be applied to the remaining buckets in thecustomer's account. Then, in step 512, the account may be updated withthe payment information.

FIG. 6 is a flow chart illustrating an exemplary process for applyingfees and charges according to an embodiment of the present invention.This process may be an exemplary implementation of step 210 shown inFIG. 2. In step 602, a credit account may be reviewed for any fees andcharges triggers. Fees and charges triggers may include any accountactivities that lead to transaction fees and finance charges. Forexample, a balance transfer may incur a minimum fee. A same-as-cashbucket not paid off at expiration of the same-as-cash promotion periodmay cause a finance charge. If it is determined in step 604 that notrigger occurred, no action is required in step 606. If one or moretriggers did occur, then certain fees may be applied in step 608 andcertain finance charges may be applied in step 610. In step 612, theaccount may be updated based on the fees and charges.

FIG. 7 is a block diagram illustrating an exemplary payment hierarchyaccording to an embodiment of the present invention. With multiplebuckets carrying separate balances in a single credit account, it may bedesirable to have a well-defined yet flexible payment hierarchy. When acustomer makes one or more payments, the payment hierarchy may specifynot only a priority order for the various buckets to receive paymentsbut also a payment allocation scheme among the buckets.

The payment hierarchy may be contingent upon the amount of payment aswell as the number and type of balance-carrying buckets. Basic rules orguidelines for the payment hierarchy may be predetermined based on thecard member agreement, card-issuer's business rules, or customerpreference. For example, a set of default rules for payments allocationmay be initially established in the card member agreement. Certainbusiness rules may be set up to maximize the card-issuer's profits. Oneexemplary business rule may be to apply payments to buckets with zero orlow APRs first before the payments are applied to higher-APR buckets.Another exemplary rule may be to give certain un-expired promotionalbuckets the lowest priority in payment allocation, so that the customermay fully enjoy the promotion benefits. The payment hierarchy may alsobe adjusted based on customer inputs. That is, the customer may contactthe card-issuer to propose a preferred payment hierarchy different froman existing configuration. The adjusted payment hierarchy may then beapplied retroactively to past payment(s) as well as future payments. Forexample, for same-as-cash transactions with deferred interest applicableif the corresponding balance is not paid in full by the expiration dateof the promotion, a payment may be retroactively applied based on anadjusted payment hierarchy.

In the exemplary payment hierarchy shown in FIG. 7, the fixed-paymentfixed-term promotion bucket 702 has the highest priority in receivingpayment. Whenever payments 700 are received, a fixed amount may beallocated to the fixed-payment fixed-term amount due bucket 702 sincethe customer has agreed to pay this fixed amount. If there is anyremaining amount, it is applied to the buckets with a second priority.The second-priority buckets may include a balance transfers bucket 704,a default bucket 706 and a convenience checks bucket 708, for example.These second-priority buckets may be associated with expired promotionalprograms and may contain balances that are accumulating finance chargesat a faster rate than other buckets. If there is any payment left afterthe second-priority buckets are paid off, the remaining buckets mayreceive the leftover payment. These lower priority buckets may havelower interest rates than those higher priority buckets. In thisexample, the lower priority buckets may include a same-as-cash promotionbucket 710, an XYZ Airline purchases bucket 712, an ABC Department Storepurchases bucket 714, a vacation package purchases 716, and afixed-payment fixed-term promotions bucket 718. The bucket 718 maycontain the remaining fixed-payment fixed-term balance that is notimmediately due.

For a better understanding of the payment re-allocation process, anexemplary scenario is described below. A card member may have takenadvantage of a same-as-cash promotion (e.g., with 0% APR for 6 monthswith deferred interest if the corresponding balance is not paid in fullby the expiration date). When the promotion expires, finance charges maybe assessed for the unpaid balance, or all the deferred finance chargesmay be assessed. The card member may call customer service of the cardissuer and request that the most recent payment be applied to thesame-as-cash promotion instead of the other buckets to which the paymenthas already be applied. A customer service representative may cause thesystem to waive the finance charges assessed on the same-as-cash balanceand re-allocate the payment to the same-as-cash bucket. A rule may beimposed to require this payment re-allocation be done within 30 days ofthe assessment of the finance charges.

The method for providing promotional pricing in accordance with thepresent invention may be typically implemented in a computer-basedsystem. The computer-based system may comprise one or more processorsand/or computers capable of data manipulation, logic operation andmathematical calculation. The system may further comprise one or moredatabases for storing and managing promotional pricing offer data,credit account data, and credit transaction data, for example. Inaddition, a number of user interfaces may be provided for thecard-issuer's personnel to set up pricing offers and to servicecustomers. The system may be implemented on computers or computernetworks.

While the foregoing description includes many details and specificities,it is to be understood that these have been included for purposes ofexplanation only, and are not to be interpreted as limitations of thepresent invention. It will be apparent to those skilled in the art thatother modifications to the embodiments described above can be madewithout departing from the spirit and scope of the invention.Accordingly, such modifications are considered within the scope of theinvention as intended to be encompassed by the following claims andtheir legal equivalents.

What is claimed is:
 1. A computer implemented method for providing promotional pricing, the computer implemented method comprising the steps of: providing one or more promotional pricing offers to one or more customers who have one or more credit accounts, wherein at least one promotional pricing offer of the one or more promotional pricing offers is directed to a transaction comprising one or more of the following: a purchase of a specific product, a purchase of any product within a defined class of products, a purchase from a specific merchant, a purchase from any merchant within a defined class of merchants, a purchase in a specific date and time range, and a purchase in a specific amount range; receiving, by at least one computer processor, information associated with a plurality of transactions conducted by a customer of the one or more customers; determining, by the at least one computer processor, that at least one of the plurality of transactions associated with at least one credit account of the one or more credit accounts of the customer qualifies for the at least one promotional pricing offer based on at least one predetermined criterion, wherein the determination is performed upon completion of the transaction; creating, by the at least one computer processor, in response to the at least one promotional pricing offer, a first promotional bucket associated with the at least one promotional pricing offer and a default bucket; linking, by the at least one computer processor, the first promotional bucket and the default bucket with the at least one credit account of the customer; assigning, by the at least one computer processor, a balance incurred through at least one of the plurality of transactions to the default bucket and the first promotional bucket based on the determination; receiving, from the customer after the balances have been assigned, an alteration of the assignment of a balance from its assigned bucket to a second bucket, wherein the alteration comprises a request to transfer the balance from the assigned bucket to the second bucket and wherein the second bucket comprises any existing bucket associated with the at least one credit account of the customer; performing, by the at least one computer processor, the transfer of the balance; allocating, by the at least one computer processor, payments associated with the at least one credit account to the existing buckets according to a predetermined payment hierarchy, wherein the payments are allocated following processing of the payments; electronically communicating additional pricing information related to the at least one credit account of the customer, wherein the additional pricing information comprises information regarding at least one other promotional pricing offer to be applied to a new promotional bucket created in response to the at least one other promotional pricing offer and comprises one or more of the following: an annual percentage rate, a transaction fee, and a rewards amount; and wherein the at least one other promotional pricing offer is defined by at least one pricing feature comprising one or more of the following: the annual percentage rate, the transaction fee, a finance charge, a balance payback method, a payment hierarchy placement, a transaction amount restriction, a qualifying transaction type, and a qualification period; and further wherein the at least one other promotional pricing offer is associated with at least one transaction type comprising one or more of the following: general purchases, specific purchases, balance transfers, convenience check transactions, cash transactions, quasi-cash transactions, existing debt, and foreign purchases.
 2. The method according to claim 1, further comprising the steps of: updating the at least one credit account based on the allocation of the payments; re-calculating, by at least one computer processor, for at least one of the default bucket and the first promotional bucket, the pricing information, the recalculated pricing information comprising one or more of the following: the annual percentage rate, an effective annual percentage rate, a jurisdiction-specific annual percentage rate, the transaction fee, a finance charge, and a rewards amount.
 3. The method according to claim 1, further comprising the steps of: making one or more hypothetical adjustments to the at least one credit account based on one or more preferences associated with the customer wherein the one or more hypothetical adjustments comprise one or more adjustments in the predetermined payment hierarchy altering a payment allocation and a balance distribution among the existing buckets; and displaying an impact of the one or more hypothetical adjustments on the at least one credit account involving the altering the payment allocation and the balance distribution among the existing buckets.
 4. The method according to claim 3 further comprising the step of: determining a status of the at least one credit account based on the one or more hypothetical adjustments.
 5. The method according to claim 1, further comprising the steps of: tracking a stream of payments and transactions associated with the at least one credit account based on a history of the at least one credit account; and determining additional promotional pricing information, comprising an annual percentage rate, for the existing buckets corresponding to the stream of payments and transactions.
 6. The method according to claim 1, wherein the step of communication further comprises communicating one or more of the following: one or more annual percentage rates associated with either the first promotional bucket or the default bucket; one or more effective annual percentage rates associated with either the first promotional bucket or the default bucket; one or more aggregated annual percentage rates associated with the at least one credit account; one or more effective annual percentage rates associated with the at least one credit account; and one or more jurisdiction-specific annual percentage rates associated with the at least one credit account.
 7. The method according to claim 1, further comprising the step of: reporting a first annual percentage rate calculated according to a first standard and a second annual percentage rate calculated according to a second standard, the second standard being derived from a government regulation.
 8. The method according to claim 1, further comprising the step of: adjusting fees and charges for the existing buckets retroactively.
 9. The method according to claim 1, wherein the at least one promotional pricing offer is associated with a rewards program.
 10. The method according to claim 1, wherein the predetermined payment hierarchy is determined based on one or more business rules.
 11. The method according to claim 1, further comprising the steps of: retroactively adjusting the predetermined payment hierarchy causing at least one past payment to be re-allocated among the default bucket and the first promotional bucket or the second bucket based at least in part on one or more preferences associated with the customer; and updating the at least one credit account based on the retroactively adjusted payment hierarchy.
 12. A computer implemented method for providing promotional pricing, the computer implemented method comprising the steps of: providing one or more promotional pricing offers to one or more customers who have one or more credit accounts, wherein at least one promotional pricing offer of the one or more pricing offers is directed to a transaction comprising one or more of the following: a purchase of a specific product, a purchase of any product within a defined class of products, a purchase from a specific merchant, a purchase from any merchant within a defined class of merchants, a purchase in a specific date and time range, and a purchase in a specific amount range; receiving, by at least one computer processor, information associated with a plurality of transactions conducted by a customer of the one or more customers; determining, by the at least one computer processor, that at least one of the plurality of transactions associated with at least one credit account of the one or more credit accounts of the customer qualifies for the at least one promotional pricing offer based on at least one predetermined criterion, wherein the determination is performed upon completion of the transaction; creating, by the at least one computer processor, in response to the at least one promotional pricing offer, a first promotional bucket associated with the at least one pricing offer and a default bucket; linking, by the at least one computer processor, the first promotional bucket and the default bucket with the at least one credit account of the customer; assigning, by the at least one computer processor, a balance associated with at least one of the plurality of transactions to the first promotional bucket upon the at least one transaction qualifying for the at least one promotional pricing offer; allocating payments, by the at least one computer processor, associated with the at least one credit account to the existing buckets according to a predetermined payment hierarchy, wherein the payments are allocated following processing of the payments; making, by the at least one computer processor, one or more hypothetical adjustments to the at least one credit account based at least in part on one or more preferences associated with the customer wherein the one or more hypothetical adjustments comprise one or more adjustments in the predetermined payment hierarchy altering a payment allocation and a balance distribution among the existing buckets; and displaying a resulting account status of the one or more hypothetical adjustments on the at least one credit account involving altering the payment allocation and the balance distribution among the existing buckets, wherein the displaying is performed interactively following the making of the one or more hypothetical adjustments and subsequent hypothetical adjustments can be made by the customer.
 13. The method of claim 12, further comprising the step of: determining a status of the at least one credit account based on the one or more hypothetical adjustments.
 14. The method according to claim 12, wherein each of the one or more promotional pricing offers is defined by at least one pricing feature comprising one or more of the following: an annual percentage rate, a transaction fee, a finance charge, a balance payback method, a payment hierarchy placement, a transaction amount restriction, a qualifying transaction type, and a qualification period.
 15. The method according to claim 12, wherein each of the one or more promotional pricing offers is associated with at least one transaction type comprising one or more of the following: general purchases, specific purchases, balance transfers, convenience check transactions, cash transactions, quasi-cash transactions, existing debt, and foreign purchases.
 16. The method according to claim 12, further comprising the steps of: electronically communicating additional pricing information related to the at least one credit account to the customer, wherein the additional pricing information comprises information regarding at least one other promotional pricing offer to be applied to a new promotional bucket created in response to the at least one other promotional pricing offer and comprises one or more of the following: an annual percentage rate, a transaction fee, and a rewards amount.
 17. The method according to claim 12, further comprising the steps of: retroactively adjusting the predetermined payment hierarchy causing at least one past payment to be re-allocated among the existing buckets based at least in part on one or more preferences associated with the customer; and updating the at least one credit account based on the retroactively adjusted payment hierarchy.
 18. The method according to claim 12, further comprising the steps of: updating the at least one credit account based on the payment allocation; re-calculating, for at least one of the default bucket and the first promotional bucket, the pricing information, the recalculated pricing information comprising one or more of the following: an annual percentage rate, an effective annual percentage rate, a jurisdiction-specific annual percentage rate, a transactional fee, a finance charge, and a rewards amount.
 19. A computer implemented system for providing promotional pricing, the system comprising: a memory, and a computer processor with said computer processor programmed to: provide one or more promotional pricing offers to one or more customers who have one or more credit accounts, wherein at least one promotional pricing offer of the one or more promotional pricing offers is directed to a transaction comprising one or more of the following: a purchase of a specific product, a purchase of any product within a defined class of products, a purchase from a specific merchant, a purchase from any merchant within a defined class of merchants, a purchase in a specific date and time range, and a purchase in a specific amount range; receive information associated with a plurality of transactions conducted by a customer of the one or more customers; determine that at least one of the plurality of transactions associated with at least one credit account of the one or more credit accounts of the customer qualifies for the at least one promotional pricing offer based on at least one predetermined criterion, wherein the determination is performed upon completion of the transaction; create, in response to the at least one promotional pricing offer, a first promotional bucket associated with the at least one promotional pricing offer and a default bucket; link the first promotional bucket and the default bucket with the at least one credit account of the customer; assign a balance incurred through at least one of the plurality of transactions to the default bucket and the first promotional bucket based on the determination; receive, from the customer after the balances have been assigned, an alteration of the assignment of a balance from its assigned bucket to a second bucket, wherein the alteration comprises a request to transfer the balance from the assigned bucket to the second bucket and wherein the second bucket comprises any existing bucket associated with the at least one credit account of the customer; perform the transfer of the balance; allocate payments associated with the at least one credit account to the existing buckets according to a predetermined payment hierarchy, wherein the payments are allocated following processing of the payments; communicate additional pricing information related to the at least one credit account of the customer, wherein the additional pricing information comprises information regarding at least one other promotional pricing offer to be applied to a new promotional bucket created in response to the at least one other promotional pricing offer and comprises one or more of the following: an annual percentage rate, a transaction fee, and a rewards amount; and wherein the at least one other promotional pricing offer is defined by at least one pricing feature comprising one or more of the following: the annual percentage rate, the transaction fee, a finance charge, a balance payback method, a payment hierarchy placement, a transaction amount restriction, a qualifying transaction type, and a qualification period; and further wherein the at least one other promotional pricing offer is associated with at least one transaction type comprising one or more of the following: general purchases, specific purchases, balance transfers, convenience check transactions, cash transactions, quasi-cash transactions, existing debt, and foreign purchases.
 20. The computer implemented system according to claim 19, with the processor further programmed to: update the at least one credit account based on the allocation of payments; re-calculate, for at least one of the existing buckets, the pricing information the recalculated pricing information comprising one or more of the following: the annual percentage rate, an effective annual percentage rate, a jurisdiction-specific annual percentage rate, the transaction fee, a finance charge, and a rewards amount.
 21. The computer implemented system according to claim 19, with the processor further programmed to: make one or more hypothetical adjustments to the at least one credit account based on one or more preferences associated with the customer wherein the one or more hypothetical adjustments comprises one or more adjustments in the predetermined payment hierarchy altering a payment allocation and a balance distribution among the existing buckets; and display an impact of the one or more hypothetical adjustments on the at least one credit account involving the altering the payment allocation and the balance distribution among the existing buckets.
 22. The computer implemented system according to claim 21, with the processor further programmed to: determine a status of the at least one credit account based on the one or more hypothetical adjustments.
 23. The computer implemented system according to claim 19, with the processor further programmed to: track a stream of payments and transactions associated with the at least one credit account based on a history of the at least one credit account; and determine additional promotional pricing information for the existing buckets of the at least one credit account corresponding to the stream of payments and transactions, wherein the promotional pricing information comprises an annual percentage rate.
 24. The computer implemented system according to claim 19, wherein the processor is further programmed to: communicate to the customer at least one piece of promotional pricing information comprising one or more of the following: one or more annual percentage rates associated with either the first promotional bucket or the default bucket; one or more effective annual percentage rates associated with either the first promotional bucket or the default bucket; one or more aggregated annual percentage rates associated with the at least one credit account; one or more effective annual percentage rates associated with the at least one credit account; and one or more jurisdiction-specific annual percentage rates associated with the at least one credit account.
 25. The computer implemented system according to claim 19, with the processor further programmed to: report a first annual percentage rate calculated according to a first standard and a second annual percentage rate calculated according to a second standard, the second standard being derived from a government regulation.
 26. The computer implemented system according to claim 19, with the processor further programmed to: adjust fees and charges for the existing buckets retroactively.
 27. The computer implemented system according to claim 19, wherein the at least one promotional pricing offer of the one or more promotional pricing offers is associated with a rewards program.
 28. The computer implemented system according to claim 19, wherein the predetermined payment hierarchy is determined based on one or more business rules.
 29. The computer implemented system according to claim 19, with the processor further programmed to: retroactively adjust the predetermined payment hierarchy causing at least one past payment to be re-allocated among the existing buckets based at least in part on one or more preferences associated with the customer; and update the at least one credit account based on the retroactively adjusted payment hierarchy.
 30. A computer implemented system for providing promotional pricing, the system comprising: a memory, and a computer processor with said computer processor programmed to: provide one or more promotional pricing offers to one or more customers who have one or more credit accounts, wherein at least one promotional pricing offer of the one or more pricing offers is directed to a transaction comprising one or more of the following: a purchase of a specific product, a purchase of any product within a defined class of products, a purchase from a specific merchant, a purchase from any merchant within a defined class of merchants, a purchase in a specific date and time range, and a purchase in a specific amount range; receive information associated with a plurality of transactions conducted by a customer of the one or more customers; determine that at least one of the plurality of transactions associated with at least one credit account of the one or more credit accounts of the customer qualifies for the at least one promotional pricing offer based on at least one predetermined criterion, wherein the determination is performed upon completion of the transaction; create, in response to the at least one promotional pricing offer, a first promotional bucket associated with the at least one pricing offer and a default bucket; link the first promotional bucket and the default bucket with the at least one credit account of the customer; assign a balance associated with at least one of the plurality of transactions to the first promotional bucket upon the at least one transaction qualifying for the at least one promotional pricing offer; allocate payments associated with the at least one credit account to the existing buckets according to a predetermined payment hierarchy, wherein the payments are allocated following processing of the payments; make one or more hypothetical adjustments to the at least one credit account based at least in part on one or more preferences associated with the customer wherein the one or more hypothetical adjustments comprise one or more adjustments in the predetermined payment hierarchy altering a payment allocation and a balance distribution among the existing buckets; and display a resulting account status of the one or more hypothetical adjustments on the at least one credit account involving altering the payment allocation and the balance distribution among existing buckets, wherein the displaying is performed interactively following the making of the one or more hypothetical adjustments and subsequent hypothetical adjustments can be made by the customer.
 31. The computer implemented system according to claim 30, with the processor further programmed to: determine a status of the at least one credit account based on the one or more hypothetical adjustments.
 32. The computer implemented system according to claim 30, wherein each of the one or more promotional pricing offers is defined by at least one pricing feature comprising one or more of the following: an annual percentage rate, a transaction fee, a finance charge, a balance payback method, a payment hierarchy placement, a transaction amount restriction, a qualifying transaction type, and a qualification period.
 33. The computer implemented system according to claim 30, wherein each of the one or more promotional pricing offers is associated with at least one transaction type comprising one or more of the following: general purchases, specific purchases, balance transfers, convenience check transactions, cash transactions, quasi-cash transactions, existing debt, and foreign purchases.
 34. The computer implemented system according to claim 30, with the processor further programmed to: electronically communicate additional pricing information related to the at least one credit account of the customer wherein the additional pricing information comprises information regarding at least one other promotional pricing offer to be applied to a new promotional bucket created in response to the at least one other promotional pricing offer and comprises one or more of the following: an annual percentage rate, a transaction fee, and a rewards amount; and provide the customer an option to modify the additional pricing information.
 35. The computer implemented system according to claim 30, with the processor further programmed to: retroactively adjust the predetermined payment hierarchy causing at least one past payment to be re-allocated among the existing buckets based at least in part on one or more preferences associated with the customer; and update the at least one credit account based on the retroactively adjusted payment hierarchy.
 36. The computer implemented system according to claim 30, with the processor further programmed to: update the at least one credit account based on the payment allocation; re-calculate, for at least one of the default bucket and the first promotional bucket, the pricing information, the recalculated pricing information comprising one or more of the following: an annual percentage rate, an effective annual percentage rate, a jurisdiction-specific annual percentage rate, a transactional fee, a finance charge, and a rewards amount. 